Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. Still, their generally high capital requirements expose them to the ups and downs of economic cycles, and the market seems to be baking in a prolonged downturn as the industry has shed 22% over the past six months. This drop was worse than the S&P 500’s 14.5% fall.

Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. On that note, here is one industrials stock boasting a durable advantage and two we’re passing on.

Two Industrials Stocks to Sell:

Global Industrial (GIC)

Market Cap: $807.2 million

Formerly known as Systemax, Global Industrial (NYSE:GIC) distributes industrial and commercial products to businesses and institutions.

Why Do We Think GIC Will Underperform?

1. 6.2% annual revenue growth over the last two years was slower than its industrials peers

2. Incremental sales over the last two years were much less profitable as its earnings per share fell by 12.3% annually while its revenue grew

3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

At $21.32 per share, Global Industrial trades at 12.8x forward price-to-earnings. Read our free research report to see why you should think twice about including GIC in your portfolio, it’s free .

JELD-WEN (JELD)

Market Cap: $436.2 million

Founded in the 1960s as a general wood-making company, JELD-WEN (NYSE:JELD) manufactures doors, windows, and other related building products.

Why Do We Pass on JELD?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion

2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 8.2 percentage points

3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

JELD-WEN’s stock price of $5 implies a valuation ratio of 6.8x forward price-to-earnings. Check out our free in-depth research report to learn more about why JELD doesn’t pass our bar .

One Industrials Stock to Buy:

Tecnoglass (TGLS)

Market Cap: $2.95 billion

The first-ever Colombian company to trade on the NASDAQ, Tecnoglass (NYSE:TGLS) is a manufacturer of architectural glass, windows, and aluminum products.

Why Are We Backing TGLS?

1. Market share has increased this cycle as its 15.6% annual revenue growth over the last five years was exceptional

2. Excellent operating margin of 27% highlights the efficiency of its business model, and its profits increased over the last five years as it scaled

3. Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 39.8% annually